*** OFFICIAL Farm Bill Thread *** (1 Viewer)

Nix the Farm Bill

October 08, 2007

Robert Reich

I’ve got a way to reduce global poverty, decrease the number of workers crossing our borders illegally, save American taxpayers money, and cut your supermarket bill -- in one fell swoop. How? Get rid of US farm subsidies and tariffs.

They were supposed to be a temporary remedy for small farmers during the Depression. But, renewed every five years regardless of which party controls Congress, farm subsidies keep going and going. They've been costing taxpayers some $11 billion a year. The Senate is now considering the latest version, and it's hardly better than what's come before.

Look, I have no problem insuring small farmers against major losses. But farm subsidies go mostly to big agribusinesses that hardly need them.

But the big problem isn't just the waste of taxpayer money. Americans -- including the US media and even Washington politicos -- tend to regard agriculture policy as the exclusive domain of legislators from farm states. Yet our farm policy is the single most damaging thing we're doing to the world's poor. Ending farm subsidies and tariffs would be the single most important thing we could do to reduce global poverty.

Fewer than 2 percent of Americans even work on a farm. Yet about half the population of the developing world depends on farming for their livelihoods. They can’t earn what the global market would otherwise pay them because America’s subsidized farm exports keep prices artificially low.

American cotton growers, for example, export cotton for just over half what it costs them to produce it. Which means more than 10 million African cotton farmers are stymied. If we stopped subsidizing our cotton businesses, world cotton prices would rise, increasing the value of cotton exports from Africa by some $300 million a year.

Meanwhile, the average American tariff on agricultural imports is 18 percent – much higher than the 5 percent average tariff on other imports. So not only do the world’s poor suffer because of our outdated farm policies, but Americans get hit with a double-whammy – we’re subsidizing US agribusiness with our tax dollars while paying some $35 billion a year more for our food than we’d pay if we didn’t also protect agribusinesses.

Our farm policies are even encouraging illegal immigration into the United States. That's because many of the world’s poor who can’t earn enough by farming are desperate to immigrate – legally or illegally – to richer countries like America.

Message to the U.S. Senate: You want to fight global poverty and illegal immigration? You want to reduce the budget deficit? You want to give American consumers a break? There's no simpler first step to accomplish all these things than to end farm subsidies and tariffs.

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Maurile Tremblay said:

1. It subsidizes unhealthy foods -- corn, soy, and wheat. And then the USDA tells everybody that these foods are healthy, so many think they are.

Click to expand...

KnowledgeReignsSupreme said:

Maurile Tremblay said:

1. It subsidizes unhealthy foods -- corn, soy, and wheat. And then the USDA tells everybody that these foods are healthy, so many think they are.

Click to expand...

Soy and wheat aren't healthy? I drink soy milk all the time and eat wheat bread.

Click to expand...

KnowledgeReignsSupreme said:

Maurile Tremblay said:

1. It subsidizes unhealthy foods -- corn, soy, and wheat. And then the USDA tells everybody that these foods are healthy, so many think they are.

Click to expand...

Soy and wheat aren't healthy? I drink soy milk all the time and eat wheat bread.

Click to expand...

Maurile Tremblay said:

Nix the Farm Bill

October 08, 2007

Robert Reich

I’ve got a way to reduce global poverty, decrease the number of workers crossing our borders illegally, save American taxpayers money, and cut your supermarket bill -- in one fell swoop. How? Get rid of US farm subsidies and tariffs.

American cotton growers, for example, export cotton for just over half what it costs them to produce it. Which means more than 10 million African cotton farmers are stymied. If we stopped subsidizing our cotton businesses, world cotton prices would rise, increasing the value of cotton exports from Africa by some $300 million a year.

Meanwhile, the average American tariff on agricultural imports is 18 percent – much higher than the 5 percent average tariff on other imports. So not only do the world’s poor suffer because of our outdated farm policies, but Americans get hit with a double-whammy – we’re subsidizing US agribusiness with our tax dollars while paying some $35 billion a year more for our food than we’d pay if we didn’t also protect agribusinesses.

Our farm policies are even encouraging illegal immigration into the United States. That's because many of the world’s poor who can’t earn enough by farming are desperate to immigrate – legally or illegally – to richer countries like America.

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Desert_Power said:

Cotton subsidies: Cotton is even more ridiculous than this article implies. We subsidize the production of cotton for a non existent textile industry. China then buys the cotton from us makes it in their factories and then sells it back to us in the form of high end goods up to the quota. <snip> Essentially, our cotton subsidy enriches China at the expense of our own taxpayers.

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Maurile Tremblay said:

Desert_Power said:

Cotton subsidies: Cotton is even more ridiculous than this article implies. We subsidize the production of cotton for a non existent textile industry. China then buys the cotton from us makes it in their factories and then sells it back to us in the form of high end goods up to the quota. <snip> Essentially, our cotton subsidy enriches China at the expense of our own taxpayers.

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This is what's going on with corn as well, except that Coca-Cola, Tyson Foods, and Cargill (and the other major purchasers of corn) play the role of China. Corn is subsidized, which in theory is supposed to help the farmers, but in fact it doesn't. It just drives down the price of corn, which reduces the farmers' profits. So they have to grow more corn to make up for it, which reduces the price even further. (Ordinary laws of supply and demand, where a reduction in price would cause a reduction in the amount supplied, do not apply given the subsidies.) The subsidies benefit the purchasers of corn, who turn it into soda or chicken and then sell it back to the public who paid for the subsidies in the first place.

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Executive Summary

The Archer Daniels Midland Corporation (ADM) has been the most prominent recipient of corporate welfare in recent U.S. history. ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts and in return have reaped billion-dollar windfalls from taxpayers and consumers. Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30

One of the most politically charged debates in Washington revolves around business subsidies known as "corporate welfare." A number of policy organizations have published studies examining the corporate welfare phenomenon: what qualifies as corporate welfare, how much it costs taxpayers, and how much it damages the economy. This study examines the dynamics of corporate welfare somewhat differently by investigating ADM as a classic case study of how those subsidies are obtained, how the welfare state encourages such "rent seeking," and how such practices fundamentally corrupt the political life of a nation. Congress's expressed desire to foster a free marketplace cannot be taken seriously until ADM's corporate hand is removed from the federal till.

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analog_hiss said:

Maurile Tremblay said:

Desert_Power said:

Cotton subsidies: Cotton is even more ridiculous than this article implies. We subsidize the production of cotton for a non existent textile industry. China then buys the cotton from us makes it in their factories and then sells it back to us in the form of high end goods up to the quota. <snip> Essentially, our cotton subsidy enriches China at the expense of our own taxpayers.

Click to expand...

This is what's going on with corn as well, except that Coca-Cola, Tyson Foods, and Cargill (and the other major purchasers of corn) play the role of China. Corn is subsidized, which in theory is supposed to help the farmers, but in fact it doesn't. It just drives down the price of corn, which reduces the farmers' profits. So they have to grow more corn to make up for it, which reduces the price even further. (Ordinary laws of supply and demand, where a reduction in price would cause a reduction in the amount supplied, do not apply given the subsidies.) The subsidies benefit the purchasers of corn, who turn it into soda or chicken and then sell it back to the public who paid for the subsidies in the first place.

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Cato Institute did a "Policy Analysis" on ADM: Archer Daniels Midland: A Case Study In Corporate Welfare

Executive Summary

The Archer Daniels Midland Corporation (ADM) has been the most prominent recipient of corporate welfare in recent U.S. history. ADM and its chairman Dwayne Andreas have lavishly fertilized both political parties with millions of dollars in handouts and in return have reaped billion-dollar windfalls from taxpayers and consumers. Thanks to federal protection of the domestic sugar industry, ethanol subsidies, subsidized grain exports, and various other programs, ADM has cost the American economy billions of dollars since 1980 and has indirectly cost Americans tens of billions of dollars in higher prices and higher taxes over that same period. At least 43 percent of ADM's annual profits are from products heavily subsidized or protected by the American government. Moreover, every $1 of profits earned by ADM's corn sweetener operation costs consumers $10, and every $1 of profits earned by its ethanol operation costs taxpayers $30

One of the most politically charged debates in Washington revolves around business subsidies known as "corporate welfare." A number of policy organizations have published studies examining the corporate welfare phenomenon: what qualifies as corporate welfare, how much it costs taxpayers, and how much it damages the economy. This study examines the dynamics of corporate welfare somewhat differently by investigating ADM as a classic case study of how those subsidies are obtained, how the welfare state encourages such "rent seeking," and how such practices fundamentally corrupt the political life of a nation. Congress's expressed desire to foster a free marketplace cannot be taken seriously until ADM's corporate hand is removed from the federal till.

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Weed It and Reap

By MICHAEL POLLAN

FOR Americans who have been looking to Congress to reform the food system, these past few weeks have been, well, the best of times and the worst of times. A new politics has sprouted up around the farm bill, traditionally a parochial piece of legislation thrashed out in private between the various agricultural interests (wheat growers versus corn growers; meatpackers versus ranchers) without a whole lot of input or attention from mere eaters.

Not this year. The eaters have spoken, much to the consternation of farm-state legislators who have fought hard — and at least so far with success — to preserve the status quo.

Americans have begun to ask why the farm bill is subsidizing high-fructose corn syrup and hydrogenated oils at a time when rates of diabetes and obesity among children are soaring, or why the farm bill is underwriting factory farming (with subsidized grain) when feedlot wastes are polluting the countryside and, all too often, the meat supply. For the first time, the public health community has raised its voice in support of overturning farm policies that subsidize precisely the wrong kind of calories (added fat and added sugar), helping to make Twinkies cheaper than carrots and Coca-Cola competitive with water. Also for the first time, the international development community has weighed in on the debate, arguing that subsidized American exports are hobbling cotton farmers in Nigeria and corn farmers in Mexico.

On Capitol Hill, hearings on the farm bill have been packed, and newspapers like The San Francisco Chronicle are covering the legislation as closely as The Des Moines Register, bringing an unprecedented level of attention to what has long been one of the most obscure and least sexy pieces of legislation in Congress. Sensing the winds of reform at his back, Senator Tom Harkin of Iowa, chairman of the Senate Agriculture Committee, told a reporter in July: “This is not just a farm bill. It’s a food bill, and Americans who eat want a stake in it.”

Right now, that stake is looking more like a toothpick. Americans who eat have little to celebrate in the bill that Mr. Harkin is expected to bring to the floor this week. Like the House bill passed in July, the Senate product is very much a farm bill in the traditional let-them-eat-high-fructose-corn-syrup mold.

For starters, the Old Guard on both agriculture committees has managed to preserve the entire hoary contraption of direct payments, countercyclical payments and loan deficiency payments that subsidize the five big commodity crops — corn, wheat, rice, soybeans and cotton — to the tune of $42 billion over five years.

The Old Guard has also managed to add a $5 billion “permanent disaster” program (excuse me, but isn’t a permanent disaster a contradiction in terms?) to help farmers in the High Plains struggling to grow crops in a drought-prone region that, as the chronic need for disaster aid suggests, might not be the best place to grow crops.

When you consider that farm income is at record levels (thanks to the ethanol boom, itself fueled by another set of federal subsidies); that the World Trade Organization has ruled that several of these subsidies are illegal; that the federal government is broke and the president is threatening a veto, bringing forth a $288 billion farm bill that guarantees billions in payments to commodity farmers seems impressively defiant.

How could this have happened? For starters, farm bill critics did a far better job demonizing subsidies, and depicting commodity farmers as welfare queens, than they did proposing alternative — and politically appealing — forms of farm support. And then the farm lobby did what it has always done: bought off its critics with “programs.” For that reason “Americans who eat” can expect some nutritious crumbs from the farm bill, just enough to ensure that reform-minded legislators will hold their noses and support it.

It’s an old story: the “hunger lobby” gets its food stamps so long as the farm lobby can have its subsidies. Similar, if less lavish, terms are now being offered to the public health and environmental “interests” to get them on board. That’s why there’s more money in this farm bill for nutrition programs and, for the first time, about $2 billion to support “specialty crops” — farm-bill-speak for the kind of food people actually eat. (Since California grows most of the nation’s specialty crops, this was the price for the state delegation’s support. Cheap indeed!)

There’s also money for the environment: an additional $4 billion in the Senate bill to protect wetlands and grasslands and reward farmers for environmental stewardship, and billions in the House bill for environmental cleanup. There’s an important provision in both bills that will make it easier for schools to buy food from local farmers. And there’s money to promote farmers’ markets and otherwise support the local food movement.

But as important as these programs are, they are just programs — mere fleas on the elephant in the room. The name of that elephant is the commodity title, the all-important subsidy section of the bill. It dictates the rules of the entire food system. As long as the commodity title remains untouched, the way we eat will remain unchanged.

The explanation for this is straightforward. We would not need all these nutrition programs if the commodity title didn’t do such a good job making junk food and fast food so ubiquitous and cheap. Food stamps are crucial, surely, but they will be spent on processed rather than real food as long as the commodity title makes calories of fat and sugar the best deal in the supermarket. We would not need all these conservation programs if the commodity title, by paying farmers by the bushel, didn’t encourage them to maximize production with agrochemicals and plant their farms with just one crop fence row to fence row.

And the government would not need to pay feedlots to clean up the water or upgrade their manure pits if subsidized grain didn’t make rearing animals on feedlots more economical than keeping them on farms. Why does the farm bill pay feedlots to install waste treatment systems rather than simply pay ranchers to keep their animals on grass, where the soil would be only too happy to treat their waste at no cost?

However many worthwhile programs get tacked onto the farm bill to buy off its critics, they won’t bring meaningful reform to the American food system until the subsidies are addressed — until the underlying rules of the food game are rewritten. This is a conversation that the Old Guard on the agriculture committees simply does not want to have, at least not with us.

But its defiance on the subsidy question may actually be a sign of weakness, for one detects a note of defensiveness creeping into the rhetoric. “I know people on the outside can sit and complain about this,” Representative Collin Peterson of Minnesota, chairman of the House Agriculture Committee, told The San Francisco Chronicle last summer. “But frankly most of those people have no clue what they’re talking about. Most people in the city have no concept of what’s going on here.”

It seems more likely that, this time around, people in the city and all across the country know exactly what’s going on — they just don’t like it.

Mr. Peterson’s farm bill passed the House by the smallest margin in years, and might have been picked apart on the floor if Representative Nancy Pelosi, the speaker of the House, hadn’t leapt to its defense.

(She claimed to be helping freshmen Democrats from rural districts.)

But Senate rules are different, and Mr. Harkin’s bill will be challenged on the floor and very possibly improved. One sensible amendment that Senator Byron Dorgan, Democrat of North Dakota, and Senator Chuck Grassley, Republican of Iowa, are expected to introduce would put a $250,000 cap on the payments any one farmer can receive in a year. This would free roughly $1 billion for other purposes (like food stamps and conservation) and slow the consolidation of farms in the Midwest.

A more radical alternative proposed by Senator Richard Lugar, Republican of Indiana, and Senator Frank Lautenberg, Democrat of New Jersey, would scrap the current subsidy system and replace it with a form of free government revenue insurance for all American farmers and ranchers, including the ones who grow actual food. Commodity farmers would receive a payment only when their income dropped more than 15 percent as the result of bad weather or price collapse. The $20 billion saved under this plan, called the Fresh Act, would go to conservation and nutrition programs, as well as to deficit reduction.

What finally emerges from Congress depends on exactly who is paying closest attention next week on the Senate floor and then later in the conference committee. We know the American Farm Bureau will be on the case, defending the commodity title on behalf of those who benefit from it most: the biggest commodity farmers, the corporations who sell them chemicals and equipment and, most of all, the buyers of cheap agricultural commodities — companies like Archer Daniels Midland, Cargill, Coca-Cola and McDonald’s.

In the past that alliance could have passed a farm bill like this one without breaking a sweat. But the politics of food have changed, and probably for good. If the eaters and all the other “people on the outside” make themselves heard, we just might end up with something that looks less like a farm bill and more like the food bill a poorly fed America so badly needs.

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palmerville said:

I don't think it too much of a stretch to envision one day that we import the vast majority of our food products simply because it's cheaper than growing our own.

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What would be the consequences of that in a war situation? If the waring country was responsible for producing most of our food?

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Maurile Tremblay said:

KnowledgeReignsSupreme said:

Maurile Tremblay said:

1. It subsidizes unhealthy foods -- corn, soy, and wheat. And then the USDA tells everybody that these foods are healthy, so many think they are.

Click to expand...

Soy and wheat aren't healthy? I drink soy milk all the time and eat wheat bread.

Click to expand...

I'm oversimplifying a bit. There are soy-based foods (e.g., tempeh, edamame, miso) and wheat-based foods (e.g., wheat germ oil) that are quite healthy. But in general, soy and wheat are not the health foods they are cracked up to be.To a very large extent, nutritional advice in this country for the last fifty years has been exactly backwards on a lot of issues, and has been driven by politics rather than science.

For more on soy, see Kaayla Daniel's book. For more on wheat (and other cereal grains), see Loren Cordain's article.

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Maurile Tremblay said:

Local food is fresher and therefore tastier and more nutritious than food that has traveled great distances. There will always be a demand for local food -- and the demand is currently growing despite the fact that small, local farms are not subsidized, so they're at a price disadvantage compared to the big factory farms.

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How can a warring country be responsible for producing most of our food? What country or group of countries could you possibly have in mind?

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the moops said:

Maurile Tremblay said:

KnowledgeReignsSupreme said:

Maurile Tremblay said:

1. It subsidizes unhealthy foods -- corn, soy, and wheat. And then the USDA tells everybody that these foods are healthy, so many think they are.

Click to expand...

Soy and wheat aren't healthy? I drink soy milk all the time and eat wheat bread.

Click to expand...

I'm oversimplifying a bit. There are soy-based foods (e.g., tempeh, edamame, miso) and wheat-based foods (e.g., wheat germ oil) that are quite healthy. But in general, soy and wheat are not the health foods they are cracked up to be.To a very large extent, nutritional advice in this country for the last fifty years has been exactly backwards on a lot of issues, and has been driven by politics rather than science.

For more on soy, see Kaayla Daniel's book. For more on wheat (and other cereal grains), see Loren Cordain's article.

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Kaayla Daniel is a crackpot.

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Farm bill upends normal political order

Carolyn Lochhead, Chronicle Washington Bureau

Sunday, May 4, 2008

Washington - -- It is the rarest of moments: President Bush and House Speaker Nancy Pelosi are on a collision course over a giant farm bill, but it is Bush who is broadly aligned with liberal Bay Area activists pushing for reform, while the San Francisco Democrat is protecting billions of dollars in subsidies to the richest farmers.

A conference committee approved on Thursday most of a nearly $300 billion farm bill that will lock in the nation's food policy and environmental stewardship on millions of acres of private land for the next five years. Hoping to survive a veto, lawmakers doled out money to everyone from thoroughbred racehorse owners to food-stamp recipients.

The package melds last year's House and Senate farm bills for votes in both chambers before going to the White House. Several controversies remain to be worked out this week. The administration threatened a veto, with Bush deriding a "massive, bloated" effort.

Lawmakers are betting that Bush will not dare kill a $10.3 billion increase in nutrition spending such as food stamps, which make up the bulk of the bill, or anger farm-state Republicans in an election year. If he does, they plan to override him.

Congress has its bases covered. Each interest group represented in the sprawling legislation - from tiny Santa Cruz organic vegetable growers to Georgia cotton magnates, from conservationists to prairie-plowers - gets enough money that it would prefer this bill rather than start over with a new president.

Farm bills come around just once every five years and usually fly under the radar of most lawmakers and the public, making it easy for Congress to tout the bills as aid to family farmers. The commodity supports - born as temporary economic aids in the 1930s - are mind-numbingly complicated and get little notice outside the farm press, despite their enormous impact on U.S. food policy. Urban lawmakers are normally happy to vote for crop subsidies in exchange for food-stamp votes from rural lawmakers. It is textbook political logrolling.

This year looked different. The local-food movement, concentrated in the Bay Area, increased attention on subsidy-driven distortions that supercharge the industrialization of agriculture, boost corn-based sugars, fats and starches in the U.S. diet and undermine poor farmers overseas.

California, the nation's farming giant, stepped into the bargaining. Produce growers, left out of crop subsidies since the 1930s, demanded marketing aid. Long-neglected organic growers were desperate for research help. Public health advocates wanted healthier school lunches. Environmentalists saw millions of acres of private land ripe for conservation and improved farming practices to reduce water and air pollution.

These groups allied with budget hawks to try to shift aid from commodities to healthier food and more sustainable farming.

The administration proposed a farm bill two years ago that would have cut off payments to wealthy farmers, modernized subsidies, and moved money to nutrition and environmental programs. When former Agriculture Secretary Mike Johanns told groups the administration's plans, "They didn't believe it," said Department of Agriculture spokesman Keith Williams. "He'd get jeers, and he'd say, 'No, it's in here.' "

Pelosi threw her weight behind farm-state Democrats, pushing a bill through the House last summer that protected subsidies, and ostensibly, the newly elected Democrats from rural districts.

"The administration is our ally in wanting more significant commodity reform," said Heather Fenney, coordinator of the California Food and Justice Coalition, a Berkeley-based group pushing for healthier food and sustainable farming.

"We've wondered if we weren't living in a parallel universe," said Ken Cook, president of Environmental Working Group. "The president has been to the left of the speaker."

Instead of cutting subsidies, Congress increased spending, raised taxes and engaged in budget acrobatics to make everything appear to fit.

As the commodities boom accelerated over the winter, boosting farm income to new records, the disconnect between the farm bill and economic reality grew more bizarre. Food riots broke out in Egypt, Haiti and other countries where the poor spend much of their earnings on food. At home, food inflation hit 4.4 percent, squeezing consumers already pinched by fuel prices.

The bill would spend about $5 billion a year on automatic payments, mostly to farmers of five crops - corn, wheat, cotton, rice and soybeans - giving two-thirds of the money to the top 10 percent of growers. Embarrassed by the spectacle, some farm-state lawmakers pushed for payment limits, fearing a loss of public support for farm aid.

Pelosi touted a ban on payments to farm couples earning more than $2 million, 10 times higher than Bush's $200,000 income limit.

At the same time, she backed a 50 percent increase in the actual amount of money each farmer could get. The Senate added a new $3.8 billion "permanent disaster" program to bail out farmers of drought-prone land, intensifying the push to plow fragile prairie.

"This is not even the illusion of reform," said Rep. Ron Kind, a Wisconsin Democrat who intends to fight a $1.7 billion cut in money added by the House for conservation. "Not when you dole out $50 billion in direct payments over 10 years that bear no relation to market prices or production. ... The president is right."

Ferd Hoefner, policy director of the Sustainable Agriculture Coalition, called the administration's proposals a mixed bag, saying administration officials "sit in the room with an incredible amount of leverage and don't negotiate."

Congress, however, produced "an utter lack of effective pro-family-farmer reform," Hoefner added.

To avoid a Bush veto, negotiators devised a complicated scheme to limit payments to extremely wealthy landowners. Hoefner calculated that married couples would have to earn $2.9 million to lose their federal checks.

At the same time, the bill would boost by 25 percent the payments farmers can collect, said Chuck Hassebrook, executive director of the Center for Rural Affairs.

"It's remarkable that anyone could call this reform with a straight face," Hassebrook said.

To secure votes, negotiators added a $93 million write-off for thoroughbred racehorses at the behest of Senate Republican leader Mitch McConnell of Kentucky, and Arkansas Democratic Sen. Blanche Lincoln. That is nearly as much money as organic farmers will get for research, data collection and certification help for small growers.

The organic money is "a very significant step, but it is very far away from a fair share" given the gains organic food has made in the market, said Mark Lipson, policy program director for the Organic Farming Research Foundation in Santa Cruz. Still, he prefers the bill to pass for fear of losing this money.

"It's just transactional politics at its worst," said Rep. Jeff Flake, a maverick Arizona Republican who plans to attack the bill on the House floor.

Pelosi threatened to blast Bush for killing the food-stamp increase if he vetoes the bill, issuing a statement urging Bush to sign the legislation to "ensure that 38 million Americans - especially children - have improved access to basic nutrition."

Adding to the likelihood that Congress could find the votes to override a veto: California fruit and vegetable growers would be furious if a veto kills their first-ever funding. Conservation groups fear losing $4 billion in new funding for environmental programs, even though that figure was cut back to make way for the disaster program.

Farm-state Republicans met with Bush to pressure him to sign the bill. "We need him to understand that this is good policy," said Sen. Saxby Chambliss, R-Ga.

Democratic presidential contenders Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York supported the farm bill last year. Likely GOP nominee Sen. John McCain of Arizona backed a failed effort at a radical overhaul and told Iowans last week that if he were president he would veto the bill, calling crop subsidies unnecessary.

For a list of senators and representatives serving on the conference committee, go to links.sfgate.com/ZDGB

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Maurile Tremblay said:

Farm bill upends normal political order

Carolyn Lochhead, Chronicle Washington Bureau

Sunday, May 4, 2008

Washington - -- It is the rarest of moments: President Bush and House Speaker Nancy Pelosi are on a collision course over a giant farm bill, but it is Bush who is broadly aligned with liberal Bay Area activists pushing for reform, while the San Francisco Democrat is protecting billions of dollars in subsidies to the richest farmers.

A conference committee approved on Thursday most of a nearly $300 billion farm bill that will lock in the nation's food policy and environmental stewardship on millions of acres of private land for the next five years. Hoping to survive a veto, lawmakers doled out money to everyone from thoroughbred racehorse owners to food-stamp recipients.

The package melds last year's House and Senate farm bills for votes in both chambers before going to the White House. Several controversies remain to be worked out this week. The administration threatened a veto, with Bush deriding a "massive, bloated" effort.

Lawmakers are betting that Bush will not dare kill a $10.3 billion increase in nutrition spending such as food stamps, which make up the bulk of the bill, or anger farm-state Republicans in an election year. If he does, they plan to override him.

Congress has its bases covered. Each interest group represented in the sprawling legislation - from tiny Santa Cruz organic vegetable growers to Georgia cotton magnates, from conservationists to prairie-plowers - gets enough money that it would prefer this bill rather than start over with a new president.

Farm bills come around just once every five years and usually fly under the radar of most lawmakers and the public, making it easy for Congress to tout the bills as aid to family farmers. The commodity supports - born as temporary economic aids in the 1930s - are mind-numbingly complicated and get little notice outside the farm press, despite their enormous impact on U.S. food policy. Urban lawmakers are normally happy to vote for crop subsidies in exchange for food-stamp votes from rural lawmakers. It is textbook political logrolling.

This year looked different. The local-food movement, concentrated in the Bay Area, increased attention on subsidy-driven distortions that supercharge the industrialization of agriculture, boost corn-based sugars, fats and starches in the U.S. diet and undermine poor farmers overseas.

California, the nation's farming giant, stepped into the bargaining. Produce growers, left out of crop subsidies since the 1930s, demanded marketing aid. Long-neglected organic growers were desperate for research help. Public health advocates wanted healthier school lunches. Environmentalists saw millions of acres of private land ripe for conservation and improved farming practices to reduce water and air pollution.

These groups allied with budget hawks to try to shift aid from commodities to healthier food and more sustainable farming.

The administration proposed a farm bill two years ago that would have cut off payments to wealthy farmers, modernized subsidies, and moved money to nutrition and environmental programs. When former Agriculture Secretary Mike Johanns told groups the administration's plans, "They didn't believe it," said Department of Agriculture spokesman Keith Williams. "He'd get jeers, and he'd say, 'No, it's in here.' "

Pelosi threw her weight behind farm-state Democrats, pushing a bill through the House last summer that protected subsidies, and ostensibly, the newly elected Democrats from rural districts.

"The administration is our ally in wanting more significant commodity reform," said Heather Fenney, coordinator of the California Food and Justice Coalition, a Berkeley-based group pushing for healthier food and sustainable farming.

"We've wondered if we weren't living in a parallel universe," said Ken Cook, president of Environmental Working Group. "The president has been to the left of the speaker."

Instead of cutting subsidies, Congress increased spending, raised taxes and engaged in budget acrobatics to make everything appear to fit.

As the commodities boom accelerated over the winter, boosting farm income to new records, the disconnect between the farm bill and economic reality grew more bizarre. Food riots broke out in Egypt, Haiti and other countries where the poor spend much of their earnings on food. At home, food inflation hit 4.4 percent, squeezing consumers already pinched by fuel prices.

The bill would spend about $5 billion a year on automatic payments, mostly to farmers of five crops - corn, wheat, cotton, rice and soybeans - giving two-thirds of the money to the top 10 percent of growers. Embarrassed by the spectacle, some farm-state lawmakers pushed for payment limits, fearing a loss of public support for farm aid.

Pelosi touted a ban on payments to farm couples earning more than $2 million, 10 times higher than Bush's $200,000 income limit.

At the same time, she backed a 50 percent increase in the actual amount of money each farmer could get. The Senate added a new $3.8 billion "permanent disaster" program to bail out farmers of drought-prone land, intensifying the push to plow fragile prairie.

"This is not even the illusion of reform," said Rep. Ron Kind, a Wisconsin Democrat who intends to fight a $1.7 billion cut in money added by the House for conservation. "Not when you dole out $50 billion in direct payments over 10 years that bear no relation to market prices or production. ... The president is right."

Ferd Hoefner, policy director of the Sustainable Agriculture Coalition, called the administration's proposals a mixed bag, saying administration officials "sit in the room with an incredible amount of leverage and don't negotiate."

Congress, however, produced "an utter lack of effective pro-family-farmer reform," Hoefner added.

To avoid a Bush veto, negotiators devised a complicated scheme to limit payments to extremely wealthy landowners. Hoefner calculated that married couples would have to earn $2.9 million to lose their federal checks.

At the same time, the bill would boost by 25 percent the payments farmers can collect, said Chuck Hassebrook, executive director of the Center for Rural Affairs.

"It's remarkable that anyone could call this reform with a straight face," Hassebrook said.

To secure votes, negotiators added a $93 million write-off for thoroughbred racehorses at the behest of Senate Republican leader Mitch McConnell of Kentucky, and Arkansas Democratic Sen. Blanche Lincoln. That is nearly as much money as organic farmers will get for research, data collection and certification help for small growers.

The organic money is "a very significant step, but it is very far away from a fair share" given the gains organic food has made in the market, said Mark Lipson, policy program director for the Organic Farming Research Foundation in Santa Cruz. Still, he prefers the bill to pass for fear of losing this money.

"It's just transactional politics at its worst," said Rep. Jeff Flake, a maverick Arizona Republican who plans to attack the bill on the House floor.

Pelosi threatened to blast Bush for killing the food-stamp increase if he vetoes the bill, issuing a statement urging Bush to sign the legislation to "ensure that 38 million Americans - especially children - have improved access to basic nutrition."

Adding to the likelihood that Congress could find the votes to override a veto: California fruit and vegetable growers would be furious if a veto kills their first-ever funding. Conservation groups fear losing $4 billion in new funding for environmental programs, even though that figure was cut back to make way for the disaster program.

Farm-state Republicans met with Bush to pressure him to sign the bill. "We need him to understand that this is good policy," said Sen. Saxby Chambliss, R-Ga.

Democratic presidential contenders Sens. Barack Obama of Illinois and Hillary Rodham Clinton of New York supported the farm bill last year. Likely GOP nominee Sen. John McCain of Arizona backed a failed effort at a radical overhaul and told Iowans last week that if he were president he would veto the bill, calling crop subsidies unnecessary.

For a list of senators and representatives serving on the conference committee, go to links.sfgate.com/ZDGB

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Buckychudd said:

KnowledgeReignsSupreme said:

Maurile Tremblay said:

1. It subsidizes unhealthy foods -- corn, soy, and wheat. And then the USDA tells everybody that these foods are healthy, so many think they are.

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Soy and wheat aren't healthy? I drink soy milk all the time and eat wheat bread.

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Not sure about the soy and wheat, but he's dead on on the corn. Farm subsidies encourage the production of High Fructose Corn Syrup since it's much cheaper to make with the subsidies than it should be.

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To help it out of this new fix the beet sugar industry could think of nowhere else to turn for help but to Congress. Its first move was to agitate for Philippine independence—less to give the little brown men freedom than to keep their sugar from coming in duty free.

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Kal El said:

Does anyone else get the feeling that the US is on it's last legs as a country? A lot of things have been happening lately that is giving us no end of trouble, and I don't think the nation will make it much longer.

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Kal El said:

Does anyone else get the feeling that the US is on it's last legs as a country? A lot of things have been happening lately that is giving us no end of trouble, and I don't think the nation will make it much longer.

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Maurile Tremblay said:

Kal El said:

Does anyone else get the feeling that the US is on it's last legs as a country? A lot of things have been happening lately that is giving us no end of trouble, and I don't think the nation will make it much longer.

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"There is a great deal of ruin in a nation." -- Adam Smith, late 18th century, to a friend who was lamenting that the revolt of the colonies was going to ruin Britain.The political climate in the U.S. will only get worse over time, but I think we have an awful long way to go before the end is nigh.

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Kal El said:

Maurile Tremblay said:

Kal El said:

Does anyone else get the feeling that the US is on it's last legs as a country? A lot of things have been happening lately that is giving us no end of trouble, and I don't think the nation will make it much longer.

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"There is a great deal of ruin in a nation." -- Adam Smith, late 18th century, to a friend who was lamenting that the revolt of the colonies was going to ruin Britain.The political climate in the U.S. will only get worse over time, but I think we have an awful long way to go before the end is nigh.

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Most major nations stay around for about a half-millennium before being relegated to the sidelines of history. However, the US has been through far more in a shorter span of time than most of these nations. In the first century of its existence alone, the US had to fight two wars with a world power at the time, a civil war, countless skirmishes with the natives (which still could have been handled far better if they didn't try to forcibly relocate them), and a lot more things. Maybe I'm being pessimistic, but I don't see the US making it out of the 21st century. There are even times where I don't think it'll make 2050 at the rate things seem to be going wrong.

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The Outlandish Farm Subsidies

by Richard Posner

The President has expressed dissatisfaction with the proposed Farm Bill wending its way through Congress. He wants farmers whose annual incomes exceed $200,000 to be denied subsidies; the present cutoff is $2.6 million and Congress will not go below $950,000. The President's concern with farm subsidies cannot be taken very seriously, since in 2002 the Republican Congress with Administration connivance greatly increased these subsidies and at the same time repealed some of the modest reforms that the Clinton Administration had introduced in 1996. The Administration's current proposals would, if enacted, be a step in the right direction, but they will not be enacted, and, judging from the 2002 legislation, they are intended I suspect merely to embarrass the Democratic Congress.

The deregulation movement passed agriculture by, leaving in place a series of government programs that lack any economic justification and at the same time are regressive. They should offend liberals on the latter score and conservatives on the former; their firm entrenchment in American public policy illustrates the limitations of the American democratic system. A million farmers receive subsidies in a variety of forms (direct crop subsidies, R&D, crop insurance, federal loans, ethanol tariffs, export subsidies, emergency relief, the food-stamp program, and more), which will cost in the aggregate, under the pending Farm Bill, some $50 billion a year, or $50,000 per farmer on average. Farm subsidies account for about a sixth of total farm revenues. So, not surprisingly, the income of the average farmer is actually above the average of all American incomes, and anyway 74 percent of the subsidies go to the 10 percent largest farm enterprises. The subsidies are regressive, especially during a recession coinciding with worldwide food shortages (i.e., high prices).

There is no justification for the Farm Bill in terms of social welfare. The agriculture industry does not exhibit the symptoms, such as large fixed costs, that make unregulated competition problematic in some industries, such as the airline industry, about which Becker and I blogged recently. It is true that crops are vulnerable to disease, drought, floods, and other natural disasters, but the global insurance industry insures against such disasters, and in addition large agricultural enterprises can reduce the risk of such disasters by diversifying crops and by owning farm land in different parts of the nation and the world. If a farm enterprise grows soybeans in different regions, a soybean blight in one region, by reducing the supply of soybeans, will increase the price of soybeans, so the enterprise will be hedged, at least partially, against the risk of disaster. Supply fluctuations due to natural disaster create instability in farm prices, but farmers can hedge against such instability by purchasing future or forward contracts. There is no "market failure" problem that would justify regulating the farm industry. All the subsidies should be repealed.

This of course will not happen, and that is a lesson in the limitations of democracy, at least as practiced in the United States at this time, though I doubt that it is peculiarities of American democracy that explain the farm programs, for their European counterparts are far more generous. The small number of American farmers is, paradoxically, a factor that facilitates their obtaining transfer payments from taxpayers. They are so few that they can organize effectively, and being few the average benefit they derive (the $50,000 a year) creates a strong incentive to contribute time and money to securing the subsidies. The free-rider problem that plagues collective action is minimized when the benefit to the individual member of the collective group is great. Then too many of the members of the farm community and hence recipients of the subsidies are wealthy, and the wealthy have great influence in Congress as a result of the lack of effective limitations on private financing of congressional campaigns and on lobbying generally. In addition, the allocation of two senators to each state regardless of population enhances the political power of sparsely populated states, which tend to be disproportionately agricultural. The key role of Iowa in the presidential electoral process is a further barrier to the abolition of farm subsidies, and the final factor is the alliance of urban with farm interests in support of the food-stamp program, itself inferior to a negative income tax, which would give the poor money but allow them to make their own consumption choices.

A puzzle about the farm programs is the heavy emphasis on money subsidies, since by reducing the cost of farming they encourage greater output, which results in lower prices for farm products, thus offsetting some, perhaps much, of the effect of the subsidies. (The lower prices are not a social benefit, because as the result of subsidization they are below cost.) Acreage restrictions, which used to be the core of federal farm policy, and which correspond to the type of entry-limiting regulations imposed on airlines, railroads, trucking, pipelines, long-distance telecommunications, banking, and the wholesale sale of electricity, before the deregulation movement, are more efficient at raising farmers’ incomes by reducing output, in effect cartelizing agriculture. Those restrictions have been reduced, but between them and export subsidies (which reduce the supply of agricultural products to American consumers) farm prices in America are higher than they would be without the farm programs, and this contributes to the regressive effects of the programs.

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Kal El said:

Does anyone else get the feeling that the US is on it's last legs as a country? A lot of things have been happening lately that is giving us no end of trouble, and I don't think the nation will make it much longer.

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Farm Bill Veto

Wednesday, May 14, 2008

Greg Mankiw

A friend at the White House emails me about the farm bill now being considered by Congress. An excerpt from the email:

A few of us have been debating the question “Which is the most important reason for the President’s veto of this bill?” Candidates include:

Too much spending: The bill increases spending by almost $20 billion over the next ten years, at a time when net farm income is at an all-time high. Much of this additional spending is disguised by budget gimmicks that take advantage of formal scoring rules to hide real spending increases.

New sugar program: The bill would make the government buy sugar for 2X the world price, store it, then resell it at about an 80% loss to the taxpayer. Sugar sells for about 11¢/lb on the world market. The US government would have to buy sugar for about 22¢/lb, store it, and then auction off the excess to ethanol plants. We estimate that such an auction would net the government about 4¢/lb. In addition, this new provision would require the government to guarantee that domestic sugar producers get 85 percent of the domestic sugar market.

Subsidies for rich farmers: Farmers would be eligible for government subsidy payments if their incomes were as high as $1.5 million if married, and up to $750,000 if single. We had a big fight with Congress last year over whether families with income of 3 times the poverty level should receive taxpayer-subsidized health insurance. This bill would subsidize amarried farming couple with income more than 107 times the poverty level (which is $14,000 for a couple). Put another way, such a couple would be in the top 0.2% of the income distribution. You would be subsidizing their business with your income taxes.

Getting the best of both worlds: “Beneficial interest” is a provision of current law which allows you to lock in a government subsidy payment when the market price for your good is low, and then hold the actual good and sell it when the market price is high. You thus get the best of both worlds – subsidy payments as if crop prices were low, but profits from selling your good at a higher price. The President proposed a “pick-your-price” reform, in which you lock in the subsidy at the same time that you lock in the sale price, so you can’t play timing games. The conference report does not include this reform, and continues the practice of current law.

Using food aid $ inefficiently: Under current law, US food assistance for hungry people around the world must be spent purchasing US crops. The President proposed to allow up to 25 percent of US global food assistance to be spent purchasing food from local farmers (in the country where the people are starving). This allows US dollars to be spent purchasing food, rather than paying transportation costs. It also encourages the development of farming infrastructure in these countries. Congress failed to include this forward-looking policy that will help save lives overseas. This means fewer starving people will get food, and these countries’ farming infrastructures will be less well developed.

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WASHINGTON (AP) -- The House overwhelmingly rejected President Bush's veto of a $290 billion farm bill Wednesday, but what was to have been a stinging defeat for the president became an embarrassing episode for Democrats.

Only hours before the House's 316-108 vote, Bush had vetoed the five-year measure, saying it was too expensive and gave too much money to wealthy farmers when farm incomes are high. The Senate then was expected to follow suit quickly.

Action stalled, however, after the discovery that Congress had omitted a 34-page section of the bill when lawmakers sent the massive measure to the White House. That means Bush vetoed a different bill from the one Congress passed, leaving leaders scrambling to figure out whether it could become law.

Democrats hoped to pass the entire bill, again, on Thursday under expedited rules usually reserved for unopposed legislation. Lawmakers also probably will have to pass an extension of current farm law, which expires Friday.

"We will have to repass the whole thing, as will the Senate," said Rep. Louise Slaughter, D-N.Y. "We can't let the farm bill just die."

Republican leaders called for a farm bill do-over. The White House, almost gleefully, seized on the fumble and said the mixup could give Congress time to fix the "bloated" bill.

"We are trying to understand the ramifications of this congressional farm bill foul-up. We haven't found a precedent for a congressional blunder of this magnitude," said Scott Stanzel, a White House spokesman. "It looks like it may be back to square one for them."

"In all likelihood, you have to redo this process," said Rep. Roy Blunt of Missouri, the No. 2 Republican and one of the 100 GOP lawmakers who broke with Bush in voting to override the veto. "I'd like to see a farm bill passed that no judge can say is not the farm bill."

About two-thirds of the bill would pay for nutrition programs such as food stamps, about $40 billion is for farm subsidies, and $30 billion would go to farmers to idle their land and to other environmental programs.

Congressional Republicans overwhelmingly abandoned Bush in voting to pass the bill last week. They overlooking its cost amid public concern about the weak economy and high gas and grocery prices. Supporters praised the spending on food stamps and emergency food aid.

Before the problem with the bill was discovered, White House spokeswoman Dana Perino said the bill could make the situation worse for struggling families.

"Members are going to have to think about how they will explain these votes back in their districts at a time when prices are on the rise," she said. "People are not going to want to see their taxes increase."

Wednesday's snag stemmed from an error made while printing the legislation on parchment before sending it to Bush.

Democratic Rep. Steny Hoyer of Maryland, the majority leader, said the section in question -- which deals with trade and international food aid programs -- was never printed. Indeed, the final 628-page version of the bill jumps straight from "Title II" on conservation programs to "Title IV" on nutrition programs.

Democrats proposed bringing up and passing the missing section separately and sending that to Bush, thus allowing the entire measure to become law. But Republicans argued that might not be constitutional because Bush actually vetoed a version that Congress never considered.

The bill would make small cuts to direct payments, which are distributed to some farmers no matter how much they grow. It also would eliminate some payments to individuals with more than $750,000 in annual farm income or married farmers who make more than $1.5 million.

Previously, negotiators were considering a $950,000 income cap for individuals on farm income.

Individuals who make more than $500,000 or couples who make more than $1 million jointly in nonfarm income also would not be eligible for subsidies.

Under current law, there is no income limit for farmers, and married couples who make less than one-fourth of their income from farming will not receive subsidies if their joint income exceeds $5 million.

The administration originally proposed a cap for those who make more than $200,000 in annual gross income but later indicated that it could accept a limit of $500,000.

The bill also would:

Boost nutrition programs, including food stamps and emergency domestic food aid by more than $10 billion over 10 years. It would expand a program to provide fresh fruits and vegetables to schoolchildren.

Increase subsidies for certain crops, including fruits and vegetables excluded from previous farm bills.

Extend dairy programs.

Increase loan rates for sugar producers.

Urge the government to buy surplus sugar and sell it to ethanol producers for use in a mixture with corn.

Cut a per-gallon ethanol tax credit for refiners from 51 cents to 45 cents. The credit supports the blending of fuel with the corn-based additive. More money would go to cellulosic ethanol, made from plant matter.

Require that meats and other fresh foods carry labels with their countries of origin.

Stop allowing farmers to collect subsidies for multiple farm businesses.

Reopen a major discrimination case against the Agriculture Department. Thousands of black farmers who missed a deadline would get a chance to file claims alleging that they were denied loans or other subsidies.

Pay farmers for weather-related farm losses from a new $3.8 billion disaster relief fund.

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videoguy505 said:

Whoops!

Congress sent the farm bill to Bush. Bush vetoed. House successfully overrode the veto with a 316-108 vote... But...

... the version of the bill that was sent to the White House was missing one of the sections. Meaning Bush vetoed a version that hadn't been passed by Congress. Meaning the whole thing is fouled up and they'll have to re-pass the full version of the bill and send it back to Bush.

WASHINGTON (AP) -- The House overwhelmingly rejected President Bush's veto of a $290 billion farm bill Wednesday, but what was to have been a stinging defeat for the president became an embarrassing episode for Democrats.

Only hours before the House's 316-108 vote, Bush had vetoed the five-year measure, saying it was too expensive and gave too much money to wealthy farmers when farm incomes are high. The Senate then was expected to follow suit quickly.

Action stalled, however, after the discovery that Congress had omitted a 34-page section of the bill when lawmakers sent the massive measure to the White House. That means Bush vetoed a different bill from the one Congress passed, leaving leaders scrambling to figure out whether it could become law.

Democrats hoped to pass the entire bill, again, on Thursday under expedited rules usually reserved for unopposed legislation. Lawmakers also probably will have to pass an extension of current farm law, which expires Friday.

"We will have to repass the whole thing, as will the Senate," said Rep. Louise Slaughter, D-N.Y. "We can't let the farm bill just die."

Republican leaders called for a farm bill do-over. The White House, almost gleefully, seized on the fumble and said the mixup could give Congress time to fix the "bloated" bill.

"We are trying to understand the ramifications of this congressional farm bill foul-up. We haven't found a precedent for a congressional blunder of this magnitude," said Scott Stanzel, a White House spokesman. "It looks like it may be back to square one for them."

"In all likelihood, you have to redo this process," said Rep. Roy Blunt of Missouri, the No. 2 Republican and one of the 100 GOP lawmakers who broke with Bush in voting to override the veto. "I'd like to see a farm bill passed that no judge can say is not the farm bill."

About two-thirds of the bill would pay for nutrition programs such as food stamps, about $40 billion is for farm subsidies, and $30 billion would go to farmers to idle their land and to other environmental programs.

Congressional Republicans overwhelmingly abandoned Bush in voting to pass the bill last week. They overlooking its cost amid public concern about the weak economy and high gas and grocery prices. Supporters praised the spending on food stamps and emergency food aid.

Before the problem with the bill was discovered, White House spokeswoman Dana Perino said the bill could make the situation worse for struggling families.

"Members are going to have to think about how they will explain these votes back in their districts at a time when prices are on the rise," she said. "People are not going to want to see their taxes increase."

Wednesday's snag stemmed from an error made while printing the legislation on parchment before sending it to Bush.

Democratic Rep. Steny Hoyer of Maryland, the majority leader, said the section in question -- which deals with trade and international food aid programs -- was never printed. Indeed, the final 628-page version of the bill jumps straight from "Title II" on conservation programs to "Title IV" on nutrition programs.

Democrats proposed bringing up and passing the missing section separately and sending that to Bush, thus allowing the entire measure to become law. But Republicans argued that might not be constitutional because Bush actually vetoed a version that Congress never considered.

The bill would make small cuts to direct payments, which are distributed to some farmers no matter how much they grow. It also would eliminate some payments to individuals with more than $750,000 in annual farm income or married farmers who make more than $1.5 million.

Previously, negotiators were considering a $950,000 income cap for individuals on farm income.

Individuals who make more than $500,000 or couples who make more than $1 million jointly in nonfarm income also would not be eligible for subsidies.

Under current law, there is no income limit for farmers, and married couples who make less than one-fourth of their income from farming will not receive subsidies if their joint income exceeds $5 million.

The administration originally proposed a cap for those who make more than $200,000 in annual gross income but later indicated that it could accept a limit of $500,000.

The bill also would:

Boost nutrition programs, including food stamps and emergency domestic food aid by more than $10 billion over 10 years. It would expand a program to provide fresh fruits and vegetables to schoolchildren.

Increase subsidies for certain crops, including fruits and vegetables excluded from previous farm bills.

Extend dairy programs.

Increase loan rates for sugar producers.

Urge the government to buy surplus sugar and sell it to ethanol producers for use in a mixture with corn.

Cut a per-gallon ethanol tax credit for refiners from 51 cents to 45 cents. The credit supports the blending of fuel with the corn-based additive. More money would go to cellulosic ethanol, made from plant matter.

Require that meats and other fresh foods carry labels with their countries of origin.

Stop allowing farmers to collect subsidies for multiple farm businesses.

Reopen a major discrimination case against the Agriculture Department. Thousands of black farmers who missed a deadline would get a chance to file claims alleging that they were denied loans or other subsidies.

Pay farmers for weather-related farm losses from a new $3.8 billion disaster relief fund.

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Talking Versus Doing

By DAVID BROOKS

Published: May 20, 2008

Correction Appended

In 1965, Mancur Olson wrote a classic book called “The Logic of Collective Action,” which pointed out that large, amorphous groups are often less powerful politically than small, organized ones. He followed it up with “The Rise and Decline of Nations.” In that book, Olson observed that as the number of small, organized factions in a society grows, the political culture becomes more divisive, the economy becomes more rigid and the nation loses vitality.

If you look around America today, you see the Olson logic playing out. Interest groups turn every judicial fight into an ideological war. They lobby for more spending on the elderly, even though the country is trillions of dollars short of being able to live up to its promises. They’ve turned environmental concern into subsidies for corn growers and energy concerns into subsidies for oil companies.

The $307 billion farm bill that rolled through Congress is a perfect example of the pattern. Farm net income is up 56 percent over the past two years, yet the farm bill plows subsidies into agribusinesses, thoroughbred breeders and the rest.

The growers of nearly every crop will get more money. Farmers in the top 1 percent of earners qualify for federal payments. Under the legislation, the government will buy sugar for roughly twice the world price and then resell it at an 80 percent loss. Parts of the bill that would have protected wetlands and wildlife habitat were deleted or shrunk.

My colleagues on The Times’s editorial page called the bill “disgraceful.” My former colleagues at The Wall Street Journal’s editorial page ripped it as a “scam.” Yet such is the logic of collective action; the bill is certain to become law. It passed with 81 votes in the Senate and 318 in the House — enough to override President Bush’s coming veto. Nearly everyone in Congress got something.

The question amid this supposed change election is: Who is going to end this sort of thing?

Barack Obama talks about taking on the special interests. This farm bill would have been a perfect opportunity to do so. But Obama supported the bill, just as he supported the 2005 energy bill that was a Christmas tree for the oil and gas industries.

Obama’s support may help him win Iowa, but it will lead to higher global food prices and more hunger in Africa. Moreover, it raises questions about how exactly he expects to bring about the change that he promises.

If elected, Obama’s main opposition will not come from Republicans. It will come from Democratic leaders on Capitol Hill. Already, the Democratic machine is reborn. Lobbyists are now giving 60 percent of their dollars to Democrats, according to the Center for Responsive Politics. The pharmaceutical industry, the defense industry and the financial sector all give more money to Democrats than Republicans. If Obama is actually going to bring about change, he’s going to have to ruffle these sorts of alliances. If he can’t do it in an easy case like the farm bill, will he ever?

John McCain opposed the farm bill. In an impassioned speech on Monday, he declared: “It would be hard to find any single bill that better sums up why so many Americans in both parties are so disappointed in the conduct of their government, and at times so disgusted by it.”

McCain has been in Congress for decades, but he has remained a national rather than a parochial politician. The main axis in his mind is not between Republican and Democrat. It’s between narrow interest and patriotic service. And so it is characteristic that he would oppose a bill that benefits the particular at the expense of the general.

In fact, in this issue, McCain may have found a theme to unify his so far scattershot campaign. He has always been an awkward ideological warrior. In any case, this year may not be the best year for Republicans to launch a right versus left crusade. But McCain has infinitely better grounds than Obama to run as a do-what-it-takes reformer.

He has a long record of taking on not only the other party, but his own. In the current Weekly Standard, the brilliant young writer Yuval Levin suggests that McCain put reforming America’s decrepit governing institutions at the center of his presidential race.

Levin points out that the health care system, the immigration system, the regulatory system and the entitlement system all need reforms. Instead of talking about personal honor or perpetual tax cuts, McCain should focus relentlessly on modernization.

In fact, Monday in Chicago, McCain declared: “In all my reforms, the goal is not to denigrate government but to make it better, not to deride government but to restore its good name.”

Obama, sad to say, failed the farm bill test. McCain may have found a theme for a nation that has lost faith in its own institutions.

Correction: May 21, 2008

The column by David Brooks on Tuesday said incorrectly that Senator Barack Obama voted last week for the farm bill. Mr. Obama did not cast a vote on the bill; he supported it.

Also, Senator John McCain spoke from Chicago on Monday, not Detroit.

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James Gibney, a reporter from the Atlantic, called me last week to ask some questions about dairy supports. He was preparing a blog post to propose a new labelling idea that might help break the frustrating stranglehold that the farm lobby has over U.S. agricultural policy. Here’s James’ idea:

To wit, every product whose ingredients benefit from a subsidy should include the following language on the label:

“This product has been subsidized by the U.S. government at taxpayer expense. For more information, please visit usda.gov.”

And every product that benefits from tariff protection should have the following language on the label:
“This product is protected from foreign competition by U.S. import tariffs. Its price is higher as a result. For more information, please visit usitc.gov.”

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Maurile Tremblay said:

A proposed regulation I would support:

James Gibney, a reporter from the Atlantic, called me last week to ask some questions about dairy supports. He was preparing a blog post to propose a new labelling idea that might help break the frustrating stranglehold that the farm lobby has over U.S. agricultural policy. Here’s James’ idea:

To wit, every product whose ingredients benefit from a subsidy should include the following language on the label:

“This product has been subsidized by the U.S. government at taxpayer expense. For more information, please visit usda.gov.”

And every product that benefits from tariff protection should have the following language on the label:
“This product is protected from foreign competition by U.S. import tariffs. Its price is higher as a result. For more information, please visit usitc.gov.”

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Kal El said:

Does anyone else get the feeling that the US is on it's last legs as a country? A lot of things have been happening lately that is giving us no end of trouble, and I don't think the nation will make it much longer.

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Maurile Tremblay said:

I just stumbled across this quote from 2008. The President is a comic genius!

"We need to stand up to the special interests, bring Republicans and Democrats together, and pass the farm bill immediately." -- Barack Obama

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Maurile Tremblay said:

I just stumbled across this quote from 2008. The President is a comic genius!

"We need to stand up to the special interests, bring Republicans and Democrats together, and pass the farm bill immediately." -- Barack Obama

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'Homer J Simpson said:

Good read there, MT.

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